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Burns & Levinson Represents Teneo Funds in Successful Resolution of First Ever Receivership of a Cannabis Company in Massachusetts

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Multi-state cannabis operator MariMed Inc. completes acquisition of Quincy, MA-based medical cannabis operator Ermont, Inc.

MASSACHUSETTS: Burns & Levinson successfully steered the resolution of the first ever receivership of a cannabis company in Massachusetts through its representation of Teneo Funds SPVi LLC, the debt holder for Quincy, MA-based medical cannabis operator Ermont, Inc. Multi-state cannabis operator MariMed Inc. completed the acquisition of the operating assets of Ermont on March 9, 2023. The acquisition required approvals by the MA Superior Court, the Massachusetts Cannabis Control Commission, and the city of Quincy, which permitted the assignment of two Host Community Agreements in Quincy to MariMed.

In 2021, Burns & Levinson and Teneo Funds petitioned the Massachusetts Superior Court to appoint a Receiver to take control of Ermont’s assets on account of a default of a $22 million plus obligation under a secured loan agreement. As part of its strategy to seek the first-ever cannabis company receivership in Massachusetts, Burns & Levinson worked collaboratively with the Massachusetts Cannabis Control Commission – providing input on the development of the new regulations on receiverships and secured party rights, and working to obtain pre-approval of a receiver – before presenting it to the court for approval. The court approved the appointment of a receiver by order dated November 22, 2021, after which time, the receiver commenced a process to sell all of Ermont’s assets to a third party. On October 13, 2022, the Superior Court approved the sale of substantially all of Ermont’s assets to MariMed.

The Burns & Levinson team was led by partner Frank A. Segall, who chairs the firm’s Cannabis Business & Law Advisory Group and Business Law Group, and partner Scott Moskol, who co-chairs the Cannabis Business & Law Advisory Group and Financial Restructuring & Distressed Transactions Group. Both are nationally-known cannabis law experts, each with over 30 years of experience in restructurings, workouts, bankruptcies, receiverships, and other insolvency-related matters.

“The work we did with Teneo Funds was not only a major win for our client, but for the entire cannabis industry, which needs the ability to solve growing insolvency problems without the benefit of bankruptcy protections. Unfortunately, we are going to continue to see more and more of these distressed situations in the cannabis market as operators confront the current realities of market saturation, lack of capital, over leveraging, growing expenditures, and onerous taxation. Whether it’s for an operator facing economic difficulties, a secured lender like Teneo who is looking to protect its investment or an opportunistic investor looking for special situation in the cannabis industry, we can help our clients find novel solutions,” said Segall.

“We are at the forefront of cannabis restructuring, and are highly skilled at navigating never-before-seen situations where experience and knowledge is key to moving forward. While receivership of a cannabis company is still a new idea, we have already seen others using our strategy as a model, and we look forward to helping others navigate this emerging area of the law,” added Moskol. Burns & Levinson was the first major Boston corporate law firm to develop a national cannabis business practice, and has been advising cannabis businesses, entrepreneurs and investors across the country for nearly a decade. The firm has unrivaled experience in cannabis and hemp/CBD business formation and corporate structuring, private placements, venture capital, M&A, securities, banking issues, fund formation, debt and equity financing, restructuring and receiverships, real estate acquisitions and leasing, intellectual property protection, 280E taxation issues, and cannabis litigation. The firm is well-known for its role in the cannabis banking industry and is among the top law firms in the country handling M&A and high-level corporate and financing deals in the private and public markets in the cannabis market.

 

Ohio Board of Pharmacy RFA II Provisional Dispensary License Issued October 2022

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OHIO:  On October 4, 2022, the State of Ohio Board of Pharmacy issued a provisional dispensary license as part of the RFA II process.

The Northeast-2 district, provisional dispensary license was granted to The Source Holding Ohio LLC, located at 14481 Cedar Road, South Euclid, OH 44121.

For more information, please reference the RFA II Provisional Dispensary License FAQ published by the Board: www.pharmacy.ohio.gov/faqRFA2.

Wednesday, July 20th: Washington, D.C. Symposium on Cannabis, Criminal Justice Reform and Clemency

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DISTRICT OF COLUMBIA: On July 20th, 2022, The Academy for Justice at the Sandra Day O’Connor College of Law – in conjunction with the Justice Roundtable, the National Cannabis Roundtable and the Weldon Project’s MISSION [GREEN] – will host an in-person symposium on federal marijuana law, public safety and presidential clemency. Speakers at the event will include former H.H.S. Secretary Kathleen Sebelius, former Deputy Attorney General James Cole, U.S. Pardon Attorney Elizabeth Oyer, Members of Congress from both parties, directly-impacted advocates and other experts on cannabis policy and criminal justice reform.

Please note that this event is closed to press.

What:

Washington, D.C. symposium on cannabis, criminal justice reform and clemency.

When:

Wednesday, July 20th, 2022

Symposium Participants Will Include:

  • Kathleen Sebelius, former U.S. Secretary of Health & Human Services, and former Governor of Kansas
  • James M. Cole, former Deputy Attorney General of the United States, and Partner & Global Co-Lead of White Collar Practice with Sidley Austin
  • Elizabeth Oyer, U.S. Pardon Attorney and former Federal Public Defender
  • Weldon Angelos, President of The Weldon Project, Co-Founder of MISSION [GREEN], Music Producer, and Criminal Justice Reform Advocate Clemency Symposium
  • John Hudak, Deputy Director of the Center for Effective Management and Senior Fellow in Governance Studies, Brookings Institute
  • Clark Neily, Sr. Vice President of Legal Studies, Cato Institute
  • Nkechi Taifa, Convener Emeritus, The Justice Roundtable; Founder and Principal of the The Taifa Group, LLC
  • Amy Ralston Povah, Founder, CAN-DO Clemency
  • Kemba Smith, Co-Convener, The Justice Roundtable; Member, Virginia Parole Board and Virginia Criminal Sentencing Commission
  • Erik Luna, Amelia D. Lewis Professor of Constitutional & Criminal Law and Faculty Director of the Academy for Justice, Arizona State University
  • Douglas A. Berman, Newton D. Baker-Baker & Hostetler Chair in Law and Professor of Law; Executive Director of the Drug Enforcement and Policy Center, The Ohio State University Moritz College of Law; author of the casebook “Marijuana Law and Policy”
  • Robert A. Mikos, LaRoche Family Chair in Law and Professor of Law, Vanderbilt University Law School; author of the casebook “Marijuana Law, Policy, and Authority”
  • Cynthia W. Roseberry, Co-Convener, The Justice Roundtable; Deputy Director, ACLU Justice Division, American Civil Liberties Union
  • Ja’Ron Smith, Partner, Dentons Global Advisors, and former Deputy Assistant to President Trump and Deputy Director of the White House Office of American Innovation
  • Mark Osler, Robert & Marion Short Distinguished Chair in Law and Professor of Law, University of St. Thomas; Member, Justice Roundtable; former Assistant U.S. Attorney
  • Mark Holden, Board Chairman, Americans for Prosperity; Sr. Vice President, Stand Together; and former Sr. Vice President, Koch Industries

Governor McKee Signs Legislation Legalizing and Safely Regulating Recreational Cannabis in Rhode Island

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RHODE ISLAND: Governor Dan McKee today signed into law the Rhode Island Cannabis Act, legalizing and safely regulating recreational adult-use cannabis in the state. The Act includes automatic expungement of prior civil or criminal marijuana possession charges, a key provision in the Governor’s original cannabis proposal to the General Assembly. 

Governor McKee was joined for the historic signing by Lt. Governor Sabina Matos, Senate Majority Leader Michael J. McCaffrey and the bill sponsors – Senate Committee on Health and Human Services Chairman Joshua Miller and House Deputy Majority Leader Scott A. Slater.

Under the new law, possession and home-growing of cannabis is now legal for adults age 21 and older, and in-store sales may begin as soon as December 1. The law also establishes a framework for common-sense adult use cannabis regulation with a strong emphasis on public health and public safety.

“This bill successfully incorporates our priorities of making sure cannabis legalization is equitable, controlled, and safe,” said Governor McKee. “In addition, it creates a process for the automatic expungement of past cannabis convictions. My Administration’s original legalization plan also included such a provision and I am thrilled that the Assembly recognized the importance of this particular issue. The end result is a win for our state both socially and economically.”

The legislation calls for a 20 percent tax rate, split up into the 7 percent sales tax, a new 10 percent cannabis tax, and a 3 percent tax by the municipality where the marijuana is sold. In addition, the legislation makes numerous investments in the creation of an equitable, accessible cannabis retail market through the set-aside of certain application fee revenues and the reservation of a portion of new licenses for social equity applicants and worker-owned cooperatives.

“The reality is that prohibition does not stop cannabis use. Since Rhode Islanders can already access cannabis just across the state border or on the illicit market, we experience all the challenges without any of the safeguards or resources that our neighboring states have. With this bill, we are ending prohibition in a way that is safe, keeps revenue in Rhode Island, and is as fair and equitable as we can possibly make it. This bill has been years in the making, and is a collaborative effort to address concerns about protecting medical use, ensuring fair governance and recognizing that we cannot make this transition without taking action to make whole the communities and individuals who have been punished for decades under prohibition,” said bill sponsor Sen. Joshua Miller (D-Dist. 28, Cranston, Providence), chairman of the Senate Health and Human Services Committee.

“Social equity has been a top concern for us throughout this whole process. Senator Miller and I represent some of the communities that have suffered disproportionate harm from prohibition for decades, resulting in generational poverty and mass incarceration. The starting line isn’t the same for people in poor, urban and minority communities, and they deserve support to ensure they get the full benefit of participating in legalization. I am grateful to my colleagues in the General Assembly for recognizing the importance of expungement of criminal records and equity in licensing, because they are absolutely critical to ending prohibition fairly,” said bill sponsor Rep. Scott A. Slater (D-Dist. 10, Providence).

“I thank all the advocates, stakeholders, staff and especially Representative Scott Slater, who has worked tirelessly on this issue for the past decade. The bill represents a strong foundation from which to build the safe, equitable regulation of cannabis for adult use. We are proud that this legislation prioritizes the participation of people most impacted by the past enforcement of cannabis laws both through automatic expungement and the creation of a licensing structure based on social equity,” said House Speaker K. Joseph Shekarchi (D-Dist. 23, Warwick).

“This is a truly momentous day for Rhode Island. I’m deeply grateful to Senator Miller for his years of hard work and leadership on this issue, and I’m incredibly proud to have been part of reaching this point. I also want to thank President Ruggerio for his support throughout this process. Ending cannabis prohibition helps us right past wrongs while creating new opportunities for all Rhode Islanders. This is the right move, at the right time, for our state,” said Senate Majority Leader Michael J. McCaffrey (D-Dist. 29, Warwick).

Rhode Island is now the 19th state to have legalized cannabis, including Massachusetts and Connecticut.

The new law will give courts until July 1, 2024, to automatically expunge past convictions, and those who want their expungement sooner may request it.

Jushi Holdings Awarded Provisional Medical Marijuana Dispensary License in Ohio

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Jushi’s Permitted Licensed Retail Footprint Increases to 40 Dispensaries Nationwide*

FLORIDA: Jushi Holdings, Inc.,  a vertically integrated, multi-state cannabis operator, announced that Campbell Hill Ventures, LLC, the Company’s 100% owned subsidiary, has been awarded a provisional medical marijuana dispensary license by the Ohio Medical Marijuana Control Program. The License is designated for 693 Old State Route 74 in Clermont County, Ohio, located just 17.5 miles east of Cincinnati2. The new store will operate under Jushi’s retail brand, BEYOND / HELLO™, and marks the Company’s first retail location in the Buckeye State. This will be the Company’s fifth vertically integrated state, accompanying Pennsylvania (by way of its affiliated subsidiaries), Virginia, Massachusetts, and Nevada. This summer, the Company plans to begin construction on the BEYOND / HELLO™ Cincinnati store and expects the store to be open by Q1 2023.

“We are very pleased with the outcome of the lottery selection, which allows Jushi to open its first licensed medical dispensary in Ohio and establish our fifth vertically integrated market. Along with this win, we intend to pursue additional retail dispensary licenses through opportunistic acquisitions to expand our Ohio retail store base,” said Jim Cacioppo, Chief Executive Officer, Chairman and Founder of Jushi. “We look forward to bringing the full Jushi retail experience to Ohio, including our new retail design system, which will provide patients with an efficient, accessible, and safe experience that goes beyond the traditional cannabis retail environment. With this newly awarded retail license, along with our existing state-of-the-art cultivation and processing assets, Jushi is well-positioned to support the rapidly evolving Ohio medical market.”

Home to over 200,000 residents3, Clermont County is located east of Cincinnati on the Ohio River, known for its rich historical roots and local cultural attractions. The new dispensary location is a five-minute drive from the Cincinnati Nature Center, which brings in over 200,000 visitors annually4. Additionally, the new location is a five-minute drive from EastGate Mall and situated close to two major routes, Route 275 and Route 32 as well as several big-box stores along Route 74. Surrounded by local museums, historic sites, parks, breweries, wineries, and golf courses, the new store is also approximately 20 miles east of major tourist sites such as Paul Brown Stadium, Newport Aquarium and Cincinnati Zoo & Botanical Gardens.

Currently, three of Jushi’s in-house brands are available in the Ohio medical cannabis market, including Sèchè, a flower line, Tasteology, a brand of premium, real fruit, cannabis-infused gummies, and The Lab, a high-quality vaporization line. In Q2 2022, Jushi expects to launch additional Sèchè flower product lines, along with its award-winning flower brand, The Bank, in Ohio.

The Ohio medical cannabis program is a limited license market with distinct licenses for cultivation, processing, and retail. The Ohio Medical Marijuana Control Program reported 261,453 registered medical patients as of March 31, 2022, and over $799 million in total medical cannabis product sales as of April 18, 2022.

* Includes an awarded conditional dispensary where Jushi owns a 49% equity interest
2 Jushi is required to apply for a Certificate of Operation from the State of Ohio Board of Pharmacy’s Medical Marijuana Control Program before commencing operations at the listed medical marijuana dispensary locations
3 United States Census Bureau, as of July 1, 2021
4 Cincinnati Nature Center Website

Congressman Blumenauer Urges Department of Transportation to Reform Driver Impairment Testing

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DISTRICT OF COLUMBIA:  Congressman Earl Blumenauer, Co-Chair of the Congressional Cannabis Caucus, released a letter urging the Department of Transportation to reform and modernize cannabis testing requirements for commercial truck drivers.

In the past two years, tens of thousands of commercial drivers have been forced out of the profession not because they are impaired on the job, but because imprecise testing practices trigger penalties for use of state-legal medical or adult-use cannabis in the days or weeks prior to testing.

“As the United States faces an unprecedented supply chain crisis, tens of thousands of commercial drivers are being disqualified from service due to past cannabis use. These disqualifications deny people the right to earn a living, reduce the workforce when drivers are desperately needed, and penalize people of color and patients who legally use medical cannabis,”Blumenauer wrote. “This crisis must be treated with urgency. Your department should rapidly reform requirements for testing drivers and returning them to service, as well as develop an accurate test for impairment.”

Read the full letter here.

State of Ohio Board of Pharmacy Issues Provisional Dispensary Licenses for RFA II 

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OHIO: On May 16, 2022, the State of Ohio Board of Pharmacy issued 70 provisional dispensary licenses as part of the RFA II process.

A list of the provisional dispensary licenses awarded can be accessed using the following links:

The Board utilized a drawing process to issue provisional dispensary licenses for RFA II. The drawings were conducted by the Ohio Lottery Commission. The Board then reviewed those applications for compliance with Chapter 3796. of the Revised Code and Medical Marijuana Control Program regulations.

For more information, please reference the RFA II Provisional Dispensary License FAQ published by the Board: www.pharmacy.ohio.gov/faqRFA2

Adult-Use Cannabis Sales Set to Begin in New Jersey April 21, 2022

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NEW JERSEY: The New Jersey Cannabis Regulatory Commission will be issuing licenses to seven alternative treatment centers (ATCs) to begin adult-use cannabis operations, including at 13 retail dispensaries, starting on  Thursday, April 21. Individuals 21 years and older will be able to purchase cannabis and cannabis products legally without a medical card. 

“This is an exciting time for New Jersey,” said New Jersey Cannabis Regulatory Commission executive director Jeff Brown. “New Jerseyans voted overwhelmingly to have access to adult-use cannabis and it is now here. I am very proud of the work the Commission has done over the past year to open the market. We have been intentional and deliberate to do everything in our power to set the market on good footing to start.”

The Alternative Treatment Centers will be required to meet social equity standards, which include providing technical knowledge to new cannabis businesses, particularly social equity applicants.

“We remain committed to social equity,” said Commission Chair Dianna Houenou. “We promised to build this market on the pillars of social equity and safety. Ultimately, we hope to see businesses and a workforce that reflect the diversity of the state, and local communities that are positively impacted by this new and growing industry.”

Medicinal cannabis companies that have been approved to open the recreational market will be assessed on diversity in hiring and management, support for community programs, the number of new and local businesses to which they provide technical support, and the percentage of minority-owned vendors or suppliers with which they contract, among other things. Dispensary scores will be posted and updated regularly on the NJ-CRC’s website.

“We know that drug prohibition laws have through history disproportionately impacted Black and Brown communities – and continue to do so,” said Wesley McWhite III, NJ-CRC’s director of Diversity and Inclusion, who will be responsible for ensuring that the ATCs licensed for recreational use comply with the Act. “A socially equitable cannabis market will have substantial representation of those communities in employment and in ownership and these companies that have been benefitting from the market for the past 12 years – and are now expanding into the lucrative recreational space – have a role in helping to accomplish that. Making the standards and the grades public ensures customers, stakeholders, advocates, and the general public have a clear picture of the equity and diversity efforts in the New Jersey market.”

Pursuant to the CREAMM Act, medicinal cannabis companies are the first to open the recreational market and the NJ-CRC has committed to assessing them on diversity in hiring and management, support for community programs, the number of new and local businesses to which they provide technical support, and the percentage of minority-owned vendors or suppliers with which they contract, among other things.

A list of locations that will open on April 21 will be posted on the Commission’s website as soon as ATCs confirm the date on which they will begin operations.

The New Jersey Cannabis Regulatory Commission establishes and enforces the rules and regulations governing the licensing, cultivation, testing, selling, and purchasing of cannabis in the state.

Oklahoma Seed-to-Sale Deadline is May 26

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All medical marijuana commercial licensees have until Thursday, May 26, to become fully compliant with the Metrc statewide seed-to-sale tracking system

OKLAHOMA:  EVERY commercial licensee must be fully Metrc-compliant by May 26. 

This means that ALL seeds, plants and products must be tagged and tracked in Metrc no later than May 26, except for dispensaries (see more in the Dispensaries section below).

ALL licensees must use Metrc for tracking inventory, transfers, waste and sales, including to patients and caregivers, no later than May 26.

No later than May 26, every licensee must be registered with Metrc, and the owner or key administrator must have already completed the New Business training. It’s offered every weekday and on-demand in Metrc Learn.

Once credentialed, licensees can log in and access the Support page to find on-demand, self-paced learning modules for additional training.

OMMA and Metrc are working together to schedule more training opportunities. Check back for updates.

Dispensaries

Like all commercial licensees, dispensaries must be fully Metrc-compliant by May 26.

Dispensaries have until Aug. 24 to sell or legally dispose of untagged items that were in the dispensary’s inventory on or before May 26. Dispensaries may not buy new untagged inventory after May 26.

Information will be available soon on how to conduct untagged sales from May 27 through Aug. 24. Check back for updates.

Required and Optional Training

Required Training

The owner or key administrator of each commercial license is required to take Metrc’s New Business class to become credentialed in Metrc.

Licensees can use the Metrc scheduler to sign up for New Business training, offered each weekday. The class is also offered on demand through Metrc Learn in your Metrc account.

When you complete the training, reach out to Metrc’s Support team to get credentialed.

Optional Training

OMMA and Metrc will conduct at least 5 free online seminars for Oklahoma commercial licensees between now and May 26. The seminars will have helpful information for licensees learning who wish to learn more about Metrc. Other training opportunities are also in the works. More information will be posted here when it’s available.

Metrc offers other advanced training courses on Metrc Learn and on its scheduler. Metrc also has training videos on its Oklahoma web page and its YouTube channel on the following topics (and many others):

Monthly Reporting

All commercial licensees must continue all monthly reporting using the OMMA Monthly Reporting Template for activity through May 26. The last template with activity through May 26 is due June 15.

Dispensaries must continue using the OMMA Monthly Reporting Template for any untagged sales and waste disposal from May 27 through Aug. 24.

Metrc will meet the monthly reporting requirements and the template is no longer necessary for all tagged sales and waste disposal after May 26.

New Cannabis Testing Rules in Oregon Effective March 31, 2022

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OREGON: The Oregon Liquor and Cannabis Commission has updated the Cannabis Tracking System (Metrc) Sampling and Testing Guide to reflect testing rule changes from the Oregon Health Authority.

The updated guide can be found here.

Information about the OHA rule changes follows below.

OLCC Recreational Marijuana Licensees and Oregon Medical Marijuana Program registrants required to use Metrc should familiarize themselves with the changes before they take effect March 31, 2022.

OHA Logo   The Oregon Health Authority writes rules for testing cannabis that effect both the medical and recreational market. Newly adopted testing rules will go into effect March 31, 2022, that make many changes to testing.Link to OHA Medical Marijuana Information Bulletin 2022-01

This bulletin is a summary of the major changes and should not be relied on solely. You may review the testing rules, found in Division 7 and 64, in full at healtheroregon.org/ommprules.

In addition, guidance documents are available to help understand sampling changes, Metrc changes related to testing, what to do with failed items, and an outline of the new tests along with a timeline. All guides can be found at healthoregon.org/marijuanatesting

For more details, please see the full text of the rules and corresponding rulemaking documents at the following website:

Healthoregon.org/ommprules If you have any questions or would prefer a hardcopy be sent, please contact PublicHealth.Rules@dhsoha.state.or.us.